Township of Springwater Development Charges Stakeholder Presentation February 21, 2018
Timelines for DC Process Project Start-up meeting – October 16, 2017 Staff Interviews – December 12, 2017 & January 3, 2018 Council Workshop – February 20, 2018 Stakeholder Meeting – February 21, 2018 Final Background Study and draft D.C. by-law – March 27, 2018 Public Meeting – April 18, 2018 By-law adoption – May 28, 2018 1
Development Charges Purpose: To recover the capital costs associated with residential and non-residential growth within a municipality The capital costs are in addition to what costs would normally be constructed as part of a subdivision (i.e. internal roads, sewers, watermains, roads, sidewalks, streetlights, etc.) Municipalities are empowered to impose these charges via the Development Charges Act (DCA) 2
DCA Overview The DCA 1997 provided a major change to the DCA 1989 which resulted in a significant loss of potential revenue to municipalities. The 1997 Act introduced a number of: Service Limitations Service Standard Restrictions Mandatory Reductions Mandatory Exemptions Bill 73, passed in December, 2015, introduced further changes The following provides a summary of the key aspects of the DCA 1997 as amended 3 3
Limitations on Services Some forms of capital and some services can not be included in the DCA. For example: Headquarters for the General Administration of the Municipality Arts, Culture, Museums and Entertainment Facilities Tourism Facilities Provision of a Hospital Parkland Acquisition Waste Management Services (updated to allow for waste diversion, as per Bill 73) 4 4
Capital Costs Capital Cost definition has been broadened to include: Acquire land or interest in land Improve land Acquire, lease, construct or improve buildings, facilities and structures (includes furniture and equipment) Equipment and rolling stock Capital component of a lease for the above Circulation materials for Libraries Studies for above including a DC Background Study Interest on money borrowed to pay for the above 5
Capital Costs (cont’d) Certain Capital Costs may not be included: Vehicle & Equipment with avg. life of <7 yrs. Computer Equipment DCA also provides for a mandatory 10% reduction of capital cost for all services except: Water, Wastewater and Stormwater Services Roads and related services (i.e. Public Works) Fire Police Transit (updated as per Bill 73) 6
Capital Costs The planning horizon for future capital needs is limited to 10 years for all services except: Water, Wastewater and Stormwater Services Roads and related services (i.e. Public Works) Fire Police Capital costs must be reduced by grants, subsidies and other contributions. May include authorized costs incurred or proposed to be incurred by others on behalf of a municipality/local board 7
Service Standards Service Standard measure provides a ceiling on the level of the charge which can be imposed Previously (DCA, 1989), provided that the DC be “no higher than” the highest level attained over the previous 10 year period. DCA, 1997 provides that the “average of the past 10 years” (except transit as per Bill 73) Impacts – generally lowers collection levels and may provide for spiral downwards if the municipality does not keep up with construction of services 8 8
Service Standard Example A municipality of 10,000 in 2000 is growing at 1,000 persons per year They have 1 arena ($5 million value) and have a council approved standard of one arena per 10,000 persons – they will construct the new arena in 2010 when they reach a population of 20,000 Following slide shows recovery under current DCA vs. 1989 DCA 9 9
Service Standard Example 600 DCA 1989 500 DCA 1997 400 300 200 100 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Arena Value 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 population 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 Service Standard 500 455 417 385 357 333 313 294 278 263 10 Yr. Avg. 359.39 10 10
Changes to the DCA (Bill 73) Effective as of January 1, 2016, DCA changes include: Transit Services – mandatory 10% deduction removed and basis for service standard measure changed Waste Diversion – to be included as an eligible service Ineligible Service definition to be moved from Act to regulations DC Background Studies to examine area rating – also to provide asset management plan for new capital Annual Report of the Treasurer – increased reporting requirements No Additional Levies Minister to have power to impose area specific changes Housekeeping changes to the Act 11
Update on Bill 73: Impact on Springwater Need to consider Area Rating as part of the Background Study (but not mandatory to impose) Consider impact of “no additional levies” in development process / detailed local service policy required to be developed Asset Management Plan required for all growth related projects identified in the study 12 12
Mandatory Exemptions Exemptions: Mandatory exemptions • for industrial building expansions (may expand by 50% with no DC) May add up to 2 apartments for a single as long as size of home doesn’t double Add one additional unit in medium & high density buildings Upper/Lower Tier Governments and School Boards 13 13
Discretionary Exemptions Exemptions: Discretionary exemptions • Reduce in part or whole DC for types of development or classes of development (e.g. industrial or churches) May phase-in over time Redevelopment credits to recognize what is being replaced on site (not specific in the Act but provided by case law) 14
Current Exemptions in Springwater’s D.C. By-law (2014-003) Exemptions Buildings or structures owned by and used for the purposes of a college or applied arts and technology established pursuant to the Ministry of Colleges and Universities Act; Buildings or structures owned by a religious organization and used for the purposes of a place of worship; Buildings or structures owned by and used for the purposes of a public hospital; Agricultural uses as well as farm buildings and other ancillary development to an agricultural use, excluding any residential uses; and Temporary buildings or structures. 15
Other items in Springwater’s D.C. By-law (2014-003) Redevelopment Where as a result of development, a building or structure existing on the land within five (5) years was or is to be demolished, in whole or in part, the development charge otherwise payable with respect to such development shall be reduced. Timing of Payment Development charges are payable on the date on which the first building permit is issued; or The Township may enter into agreements providing for all or any part of a development charge to be paid before or after it would otherwise be payable. Indexing Development charges imposed shall be adjusted annually on January 1st, without amendment to the By-law. 16
Local Service Policies Subdivision Agreement Conditions - the Act broadens the coverage of such agreements to include “local services related to a plan of subdivision or within the area to which the plan relates”, rather than simply local services within a plan of subdivision, as under the old Act. This suggests the need for a D.C. Background study to provide a local service policy Further, due to Bill 73, “no additional levies” clause, a Local Service Policy is required to be developed and approved by Council, through the D.C. study process, to clearly define what developers would be required to do as part of their development agreements versus what would be included in the D.C. Items to consider are collector & arterial roads, intersection improvements & traffic signals, streetlights & sidewalks, Bike Routes/Bike Lanes/Bike Paths/Multi-Use Trails/Naturalized Walkways, Noise Abatement Measures, Land dedications/easements, Water, Wastewater, Stormwater, and Park requirements. 17
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